ITT Reports Strong First-Quarter Results and Raises Full-Year Guidance

  • Revenue up three percent to $2.6 billion.
  • Earnings from continuing operations of $0.79 per share. Adjusted earnings from continuing operations up 17 percent to $0.84 per share.
  • 2010 adjusted earnings per share guidance increased to a range of $4.05 to $4.20 – projected midpoint growth of nine percent over 2009 adjusted earnings per share. Revenue guidance raised to four percent total growth and three percent organic growth.

WHITE PLAINS, N.Y. — (BUSINESS WIRE) — April 30, 2010 — ITT Corporation (NYSE: ITT) today reported 2010 first-quarter revenue of $2.6 billion and income from continuing operations of $146 million, or $0.79 per share. Excluding special items, income from continuing operations for the quarter was $156 million, or $0.84 per share, representing 17 percent year-over-year growth. Special items in the year-ago period included a $54 million tax-related gain, compared with a $10 million expense in the first quarter of 2010, primarily related to the recent U.S. healthcare reform legislation.

“Promising organic growth combined with ITT’s focused execution got us off to a great start in 2010. Our Motion & Flow Control business delivered significant increases in revenue and operating income. Our Defense & Information Solutions business made great progress on its strategic realignment, and significant productivity gains drove margin improvements in both our Fluid Technology and Motion & Flow Control businesses,” said Steve Loranger, ITT’s chairman, president and chief executive officer.

The company also raised its full-year 2010 adjusted earnings per share guidance from its previously announced forecast of $3.90 to $4.10 to a new forecast of $4.05 to $4.20. Revenue guidance for the year is revised from the company’s previously announced forecast of three percent growth to a new forecast of four percent growth. Organic revenue (defined as total revenue excluding foreign exchange and merger and acquisition impacts) is expected to grow three percent, compared with a previous forecast of two percent growth.

“Our global teams delivered results above expectations, and we are seeing improving conditions in certain end markets, giving us confidence in raising our full-year earnings outlook,” said Loranger. “We also delivered higher than expected free cash flow, and our strong financial position enabled us to announce an 18 percent dividend increase in the quarter, while we continued to advance our cash deployment and portfolio strategy through ITT’s acquisition of Nova Analytics.

“We believe our strategies to align the portfolio with enduring human needs, while delivering organic growth and focused execution, will continue to drive excellent, sustainable growth -- as ITT has demonstrated this quarter and over the past five years.”

First-Quarter Segment Results

Defense & Information Solutions

  • First-quarter 2010 revenue for the Defense segment was $1.5 billion, down four percent compared to the year-ago period. Volume declines from strong prior-year results for tactical radios and counter improvised explosive device units were partially offset by growth in service contracts, special purpose jammers and very strong international night vision goggle revenues.
  • Strong productivity in the segment was more than offset by increased costs related to the business’ strategic realignment, higher pension costs, and lower volumes, resulting in an 11 percent decline in operating income to $146 million.
  • Backlog at the end of the quarter was $5 billion, and significant orders during the quarter included international night vision goggles, airborne integrated defensive electronic countermeasures, Saudi Arabia tactical radios and next generation satellite radios. ITT was also selected by the U.S. Air Force Space and Missile Systems to provide components and services for the next generation of the Global Positioning System (GPS).

Fluid Technology

  • First-quarter 2010 Fluid Technology revenue of $801 million was up eight percent on a year-over-year basis. Organic revenue was flat, as growth in residential markets was offset by a decline versus the strong year-ago period in industrial projects. Organic orders for the segment were up three percent, largely driven by stabilizing residential market conditions and strong mining, oil and gas projects.
  • First-quarter segment operating income was $91 million, up 32 percent from the comparable prior-year period, driven by exceptional productivity and lower restructuring and realignment costs.
  • Key recent achievements include an award to create an energy-efficient water system in Chongqing, China; a full suite of treatment equipment to upgrade a water reclamation plant in Maryland with ITT’s Flygt, Leopold, WEDECO and Sanitaire product lines; a desalination award in Saudi Arabia; and the start-up of the one of the largest dissolved air flotation water treatment systems in North America. The company also completed the acquisition of Nova Analytics, establishing a new growth platform for ITT in the $6 billion analytical instrumentation market.

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